The college-athletics business: Student athletes seek a cut of their sports' profits

IT IS the way the game has long been played. In two of the most popular and money-spinning sports in the United States, basketball and American football, talented young players hoping to turn professional are first, in effect, forced to undergo between one and three years of amateurism. This is because professional teams select almost all their new players from university and college teams which follow the rules of the National Collegiate Athletic Association (NCAA).

In their amateur years most players get their tuition fees paid, but the colleges and the NCAA receive the income from televising games and related merchandise. Some of that is used to offer scholarships for deserving but less stellar players, and to support other, less lucrative sports.

Several professional players, angry that their earning-power was crimped during some of their most productive years, have brought a series of lawsuits. The suits have been combined into a class action against the association, in the name of Ed O’Bannon, a former college-basketball star (pictured). This accuses the NCAA of breaking antitrust law. In the latest hearing, on July 19th, six current players from college-football teams joined the case.

Lawyers for those bringing the case claim that other current student athletes would join in, but fear reprisals: the NCAA wields immense power over them, governing their eligibility to compete and receive scholarships. The association’s lawyer angrily rejects any suggestion that it would retaliate.

Although the court case is likely to drag on for at least another year, it has already prompted the association to scrap a licensing deal with EA Sports, the maker of NCAA-branded football video games and a co-defendant in the case, when it expires next year. The inclusion of current athletes in the lawsuit means a much bigger source of revenue is now at stake: a college-sports broadcasting deal with CBS Sports and Turner Broadcasting worth $10.8 billion over 14 years.

Last year the NCAA’s revenues were $872m, but the athletics departments of its member colleges together raked in an estimated $11.4 billion, including grants and subsidies of various sorts and fees charged to students. The University of Texas had the highest athletics revenues, at $163m, but most institutions do not earn enough to cover the costs of their sports programmes. All would stand to lose large amounts if they had to pay star athletes according to their pulling power.

In 1984 some of the colleges themselves sued the NCAA over football television revenue, alleging a cartel and price-fixing. The Supreme Court agreed and gave the colleges the power to strike their own broadcasting deals if they wished. As for the players, however, a brief comment in the court’s long ruling said that, to preserve the character and quality of college sports, they must not be paid. The association argues that this still holds, but the torrent of television money that has flowed to the colleges since the court’s decision has heightened a feeling that the athletes are being exploited. Coaches of college teams can earn millions of dollars a year, and other athletics officials also do nicely.

History does not seem to be on the NCAA’s side. Players of professional Major League Baseball gained the right to be free agents in the 1970s. In the same decade the Olympics began to phase out amateurism: now only boxing and wrestling are all-amateur. But the NCAA is not giving up easily. It argues that paying athletes would corrupt the spirit of college games, and that the players are students first, athletes second—despite the fact that few star players finish their degrees.